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Cyrus Mistry as new TATa sons chairman

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Being Cyrus: genX in the driver’s seatOn the face of it, there is a lot that differentiates the incumbent from thesuccessor — Ratan Naval Tata and Cyrus Pallonji Mistry. Tata was 54 in1991, Mistry will be 44 in 2012-13 when he takes over the mantle at theBombay House.If not for the Tata group, Ratan Tata alreadyhad an offer from IBM at his disposal back in 1964, which he refused atthe behest of a certain Jehangir Ratanji Dadabhoy Tata.Mistry joined the board of Shapoorji Pallonji & Co — a firm hisgrandfather founded — as director in 1991, the same year Tata tookover as the chairman of Tata Sons.Three years later Mistry was appointed the managing director of theShapoorji Pallonji Group in 1994.Tata assumed the leadership role more by circumstance, rather thanchoice, while Mistry, many say, grew into the role.Tata loves going out for long walks with his dogs. Mistry loves horse-riding and is an avidgolfer.Yet, Mistry isconsidered more of an“insider” in the TataGroup.“I have been impressedwith the quality andcalibre of hisparticipation, his astuteobservations and hishumility,” Tata wasquoted as saying in astatement on Wednesday.“He is intelligent and qualified to take on the responsibility being offered,”Tata added.

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“I’m surprised, yes, but at the end of the day he is not controversial,given his position as the largest shareholder,” said AM Naik, chairman ofengineering conglomerate Larsen & Toubro.Mistry, 43, is a graduate of civil engineering from Imperial College, UK(1990) and has a M.Sc. in Management from London Business School.Shapoorji Pallonji Group’s recent foray into agriculture & bio fuels, withthe leasing of 50,000 hectares in Ethiopia, was overseen by CyrusMistry.Cyrus joined the Board of Tata Sons in 2006. He has been a director ofTata Power and Tata Elxsi in the past. Mistry’s grandfather first boughtshares in Tata Sons in the 1930s, which currently stands at 18.5%making his father Pallonji Mistry, the largest single shareholder in aconglomerate largely controlled by trusts.The chairman-designate, who stepped down as managing director fromthe Shapoorji Pallonji group to avoid conflict of interest, will beresponsible for leading a group that boasts of revenues of more than$83 billion (Rs 4349.2 crore).Mistry, like Ratan Tata, has remained steadfastly away from the limelightfor much of his career — neither attending the in-house parties nor theout-house social dos, said an executive of a Tata firm, who did not wishto be identified.What lies ahead for the man who hands overbaton?After growing revenues more than 25 times since he took charge in1991, Ratan N Tata is going through the pace to hand over the reins in13 months. Even as he would work with Cyrus P Mistry to ensure asmooth transition, speculation abounds about Ratan Tata’s future rolewithin the TataGroup.While a Tata Sons spokesperson said that he will “completely retire fromthe group, as stated, with no executive or non-executive role assigned tohim.”That explanation, however, may find few takers. For one, Tata appearsto have acquired a larger than life stature within the group. For another,

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he will continue to head the two trusts — Ratan Tata Trust and DorabTata Trust — that together control 66% of the equity of Tata Sons, whichin turn is the holding company of Tata Group.According to the Tata Sons spokesperson, the trust constitutionmandates that the trust chairmen occupy the position for life.“It was a similar situation in 1991 when Ratan Tata took over aschairman of Tata Sons and J R D Tata remained chairman of the trusts,”said the company spokesperson, adding that it is not necessary that theTata Sons chairman will end up becoming the chairman of the Trustsafter Ratan Tata retires.Industry watchers say Tata’s role in the group after December 2012,when he retires, is as yet unclear.“For next one year he continues to be the chairman. We don’t know yetwhat future role he is going to take. It is too early to take a call on it,”said SP Tulsian, an independent analyst.Ratan Tata has been the chairman of Tata Sons, the promoter holdingcompany of the Tata group, since 1991. He is also the chairman of themajor Tata companies, including Tata Motors, Tata Steel, TataConsultancy Services, Tata Power, Tata Global Beverages, TataChemicals, Indian Hotels and Tata Teleservices. During his tenure, thegroup’s revenues have grown manifold, totalling over $83 billion(R4,349.2 crore) in 2010-11.The great grandson of Jamsetji Tata, the group’s founder, Ratan Tata,joined the group in December 1962, after turning down an offer from IBMon the advice of JRD Tata.He used to earlier work at the Tata Steel’s Jamshedpur steel plant withother blue collar employees at the blast furnace.After serving in various companies, he was appointed director-in-chargeof the National Radio and Electronics Company in 1971. In 1981, he wasnamed chairman of Tata Industries, the group’s other promoter holdingcompany, where he was responsible for transforming it into a groupstrategy think-tank, and a promoter of new ventures in high technologybusinesses.

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Noel Tata: the insider who did not make itBoth — Ratan Naval Tata or RNT to friends and peers, and his half-brother Noel Naval Tata — belong to the same family, the House of theTatas. Both are introvert and extremely reclusive. And both have cuttheir teeth in as young executives and risen through the ranks.member search committee sprang a surprise by choosing 43-year-oldCyrus P Mistry, Noel’s brother-in-law as Rata Tata’s heir designate.Insiders to the house of Tatas say Noel was always the outsider. A top-ranking executive with a prominent Tata company back in 2006 hadrubbished any speculation of Noel taking over from RNT.Though Noel has been around since 1997, he was not on the radar evenwhen he became a director at Titan and Voltas in 2003. It was only in2008 that this executive heard his name uttered for the first time in theboard rooms of the Bombay House. And that name stayed on until onWednesday, Mistry, Noel’s brother-in-law, was announced to succeedRNT.Noel, 54, is married to Aloo Mistry, daughter of Pallonji Shapoorji Mistry,the single largest shareholder in Tata Sons outside of the trusts. Whathas come as a surprise is that though he himself chooses to stay in thebackground, Noel’s career graph within the group has soared, andtherefore was the heir-apparent.He began his career with Tata International, when he took over as themanaging director of the company along with being appointed as thechairman of Tata Investments in June last year.He also holds the position of non-executive vice-chairman at Trent andremains on the boards of group companies Titan and Voltas.“Look at the constitution of the selection panel. It has at least twocandidates who may have had hidden ambitions of becoming chairmanthemselves,” said a prominent industry leader who did not wish to beidentified.